Committee votes to bump up cigarette tax even more

Friday

Just a day after voting to raise the state cigarette tax by 75 cents per pack, an Illinois Senate committee voted Thursday to make the increase 90 cents instead.

Just a day after voting to raise the state cigarette tax by 75 cents per pack, an Illinois Senate committee voted Thursday to make the increase 90 cents instead.

“What’s the number going to be (Friday)?” asked Sen. Bill Brady, R-Bloomington.

“We’d better vote on this quick,” responded Sen. John Cullerton, D-Chicago, sponsor of the bill.

The state tax is now 98 cents per pack.

Using numbers provided by an anti-tobacco group, Cullerton said a 75-cent tax hike could generate about $328 million that could be used to finance $4 billion worth of bonds for state construction projects, including roads and schools.

Cullerton returned to the committee Thursday and asked for another 15 cents per pack. He said the extra $50 million a year generated by that increase would be used to reduce the state’s $1.1 billion backlog of Medicaid bills. The $50 million would be used to get matching funds from the federal government, allowing the state to pay off $100 million a year in Medicaid debt.

Cullerton also acknowledged that the extra money would cushion the state in case the original revenue estimates from the anti-tobacco group proved too optimistic. State analysts had estimated a 75-cent per pack increase would generate only $300 million a year.

Republicans on the committee said cigarette taxes are a poor choice to finance bonds.

“We get a diminishing return over time,” said Sen. Matt Murphy, R-Palatine.

The Senate Revenue Committee also cleared the way for each county in the state to impose its own additional cigarette tax of up to $2 per pack. Such an extra tax would have to be approved by individual county boards. Currently, only Cook County has a separate cigarette tax.

No opponents were allowed to testify during Thursday’s hearing.

But Bill Fleischli of the Illinois Association of Convenience Stores said later that allowing each county to impose its own tax would create an administrative nightmare.

Fleischli’s group also opposes the bill because cigarettes are the most popular product at convenience stores. Higher taxes will drive smokers out of state to buy cigarettes, he said.

Also Thursday, Senate committees approved a full-year spending plan for the state and a $6.7 billion construction bond program.

Sen. Donne Trotter, D-Chicago, said the budget crafted by Senate Democrats fully funds pensions and pay raises and would provide $900 million more for schools. The bond program would provide $2.5 billion for school construction, $2.8 billion for roads and nearly $1 billion for mass transit projects.

However, both plans rely on money from a gambling expansion bill that was approved by the Senate, but defeated in a House committee.

“I didn’t realize it had been defeated,” Trotter said when Republicans quizzed him on the gambling bill. “It’s still in committee. Let’s hope for an immaculate resurrection.”

A spokesman for House Speaker Michael Madigan, D-Chicago, said the speaker would not comment on the Senate plan until the upper chamber approves it. Even some Senate Democrats have said they don’t think the budget plan is realistic and they plan to vote against it.

Reach Doug Finke at (217) 788-1527 or doug.finke@sj-r.com.

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